Wednesday, September 17, 2008

Retailer Warranty/Replacement Plans: more than a matter of reading the fine print

Typically, I purchase many of my consumer electronics at Circuit City because I have had mostly success in getting them to honor their product replacement plans (when I purchase them). Point in case, I purchased an in-car dvd system through Circuit City not that long ago and did buy the replacement plan. Having young children, I depend on the dvd system. So, when the system blue-screened after about six months of use, I hurried into Circuit City and they replaced the unit and had me back on the road in less than thirty minutes. Whew! Dodged that bullet with my three year old. Consumer happy.

Last Friday I stopped in Best Buy to look at IPods. I settled on an IPod Nano and was set to go. The sales clerk recommended that I purchase for $20 the Best Buy replacement program. Having heard my student's complaints about Best Buy replacement programs for years now, I was wary, but asked for an explanation about the program. The clerk told me that the program for IPods was "different" and that if my IPod broke, I would bring it to them and they would just give me a new one, no hassle. I said great, sounds like you are now matching your competitor, Circuit City. So, I purchased the program and went home (they did conveniently put the details into my bag only after the purchase).

Upon arriving home, of course, I read the details and discovered that the program is simply one where if my Ipod breaks, I must bring it to them and they will mail it for me to the manufacturer under the warranty. After one year, they will mail it away to a repair center for me, so long as a "covered defect" is found. This is not what I was sold, so I went back to the store, asked for and was given a refund. The manager at Best Buy informed me that no one sells replacement plans on IPods, not even Circuit City. So, of course, I called Circuit City while I was standing there at Best Buy. Of course, the Circuit City replacement plans are available for the IPod. Consumer not-happy with Best Buy.

Surely, the outright deception is disturbing (see Rant #13: Retail Warranty at Best Buy, but be cautioned about the language). Of course, product warranties are uniform across retailers (see Apple's IPod warranty). Yet, there can be a marked difference not only amongst companies honoring their own warranties, but also amongst retailers who sell these "replacement" or "warranty extension" plans. The heart of the matter is that while companies may offer warranties, the track record of the company either making good products or performing warranty service if it fails is what matters.

While I am a big believer in reading the fine print, this goes to remind me that the business practices of sellers should matter to consumers. Deception in the sale of warranty extension plans is obviously unacceptable. While the plans themselves often differ (perhaps for market reasons), how and whether companies honor their plans ultimately determines the value of the plan. As for me, you know who I will be getting service from if my IPod needs it.


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